According to the assessments of firms in industry excluding construction and in services with 20 or more employees, sales were strongly affected by the COVID-19 pandemic in the first nine months of 2020. The expectations for the next six months, as surveyed before the recent resurgence in infection in Italy, are slightly positive in industry excluding construction but remain pessimistic in services.
The reduction in the demand for labour was less marked than that in economic activity. The repercussions of the sharp fall in sales for the number hours worked and for employment were mitigated by the job support measures. Corporate profitability decreased. The demand for bank loans in the first half of the year grew significantly owing to the increased liquidity needs.
The uncertainty about the economic outlook and the fall in sales were accompanied by a sharp reduction in investment in the current year compared with the plans formulated at the end of 2019. For next year, about one in two firms expect to keep their investment expenditure stable, while the remaining firms anticipate that capital accumulation may strengthen.
A sharp drop in output in 2020 is expected for the construction sector as well, despite a clear improvement in the second half of the year. Employment expectations point to stability for the year as a whole. For 2021, firms expect a marked rebound in total production: 57 per cent anticipate an increase, while 15 per cent believe there will be a reduction. The recovery is expected to be driven by residential building and by public works.
